The increase of supply over demand, and the collapse of the middle B2B digital distribution era have sent many video stores out of business, causing traditional distributors to exercise caution by buying cheap, and returning what does not sell.

Piracy affects distributors to the extent that 20 million subscribers will wait and watch the film on Netflix, which also hurts the theatrical business, creating a competitive market where volume is critical.

In the broadcast market where TV and Internet are becoming one, TV purchases are unreliable, and slashed prices impact rights/revenue streams. Considering technological advances, only a change in supply can alter this.

Of course, there’s no escaping the digital effect. With the iPad, rental business such as Netflix are expected to increase. VOD (video-on-demand) accounts for around 80% of digital revenue. Some films make up to six figures, others next to nothing. The interface is friendlier to filmmakers and film consumption.

As far as festivals go, they help audiences and filmmakers find each other. Of course, if the film has festival appeal, it makes sense to go down that path. However the approach for filmmakers and festivals should be distribution-centric.

Key points to keep in mind when negotiating distribution deals:

  1. Get references and check them to evaluate the distributor’s claims.
  2. Analyze the middlemen between distributor and each revenue stream.
  3. Protect yourself from material breach.
  4. Define recoupable costs properly and do not cap them.
  5. Do not give up rights unless you have a solid reason.
  6. Take full responsibility for knowing and reaching your film’s audience.
  7. Use good photography and imagery to market the film.
  8. Allow a pro distributor to create the trailer.